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        Case ID :
        Customs, DGFT & SEZ

        Trade associations are liable for service tax under Clubs and Association Services

        May 15, 2008

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        It has been clarified by the Central Board of Excise and Customs (CBEC) that the trade association falls within the scope for "clubs and association services". 

        It was held that the services provided by these associations are not of charitable, religious or political in nature.  They collect membership fees and other charges from their members and they work for the interest of trade and industries.  Therefore, they do not have objectives which could be categorized as public service.  Accordingly, they do not fall within the scope of the excluded categories. 

        It was further clarified that the services provided by the trade associations to their own members are not in the nature of "self service" by virtue of the Explanation under Section 65 of the Finance Act, 1994 which clearly states that the taxable services includes any service provided by any unincorporated association or body of person to a member thereof, for cash deferred payment or any other valuable consideration.

        Clubs and association services: trade associations' member services classified as taxable, not charitable or self-service under service tax rules. Trade associations providing services to members are taxable as clubs and association services; their activities are not charitable or public-service in character because they collect membership fees and operate for trade interests. Services by unincorporated associations to members are not 'self service' under the Explanation to the Finance Act and are taxable when provided for cash, deferred payment, or other valuable consideration.
                          Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                            Provisions expressly mentioned in the judgment/order text.

                                Clubs and association services: trade associations' member services classified as taxable, not charitable or self-service under service tax rules.

                                Trade associations providing services to members are taxable as clubs and association services; their activities are not charitable or public-service in character because they collect membership fees and operate for trade interests. Services by unincorporated associations to members are not "self service" under the Explanation to the Finance Act and are taxable when provided for cash, deferred payment, or other valuable consideration.





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